Shares of 13 Central Public Sector Enterprises (CPSEs) hit 52-week lows on Thursday, with the BSE CPSE index falling 1.3% in intraday trading. These stocks were down up to 3 per cent in intraday deals, reflecting concerns over muted growth prospects for these government-controlled companies. At 10:26 AM, the BSE CPSE index was down 1.2 per cent, compared to a 0.51 per cent decline in the BSE Sensex, further highlighting the underperformance.
Among the affected stocks were ONGC, NTPC, BDL, BEL, and IOC. Other CPSEs reaching lows included Power Grid Corporation, NMDC, Mazagon Dock Shipbuilders, Indian Renewable Energy Development Agency (IREDA), Indian Railway Finance Corporation (IRFC), Rashtriya Chemicals and Fertilizers (RCF), Rail Vikas Nigam (RVNL), and SJVN.
Broader CPSE Index Underperforms
The BSE CPSE index, tracking companies with 51% or more government ownership, has underperformed the broader market. Launched on September 29, 2014, the index fell 7% in the past month, compared to a 4.4% decline in the BSE Sensex.
Analysts predict muted growth for defense PSUs in the upcoming quarter, with revenue growth ranging from flat to lower double digits, in line with historical trends. However, private players could showcase strong execution in Q2, with revenue growth of 10–50 per cent YoY.
Mixed Outlook for CPSE Sectors
The outlook for CPSEs varies across sectors. Oil marketing companies (OMCs) are expected to post a combined loss of ₹5,900 crore in Q2FY27, a stark contrast to the ₹17,900 crore profit a year ago. This is due to gross marketing margins on diesel and petrol turning to losses of ₹24/litre and ₹2/litre, respectively, despite refining margins of $17-38/bbl. OMC earnings will also be pressured by the weakening INR and rising crude oil prices. The ₹3,000 crore LPG subsidy support from the government, provided since November 2025, will end in October, unless new measures are announced.
Regulated utilities like NTPC, Power Grid, SJVN, and NHPC are projected to report stable earnings, supported by assured returns on their regulated equity base. Analysts anticipate stagnant order books and potential margin pressures for PSUs, with lower double-digit revenue growth, while private players may see higher double-digit growth, partially aided by spillover from Q1. Large order book additions are likely to materialize in H2FY27, according to analysts.
